Pressure to slow growth in provinces
THE central government is to put more pressure on coastal provinces and the non-state sector to slow their economic growth.
This follows newly-released statistics showing the value of industrial production in June shot up by an unprecedented 32 per cent compared with the same period last year.
And economic cadres have indicated that executive fiats will play an equally important role as economic mechanisms in the ongoing austerity programme.
From the unexpectedly high figures for industrial growth, it is evident that the rectification campaign, officially known as measures to ''boost macro-economic adjustments and controls'', is getting into high gear.
The State Statistical Bureau indicated yesterday that the rate of increase in the value of industrial output had been more than 20 per cent for the past 12 months, the highest level since economic reform started 14 years ago.
Coastal provinces and the non-state sector had led the other sectors by large margins.
Industrial production in the six richest provinces of Guangdong, Hainan, Jiangsu, Zhejiang, Fujian and Shandong rose by more than 40 per cent in June.
The increase in the value of production attained last month by the six amounted to 60 per cent of the national total. By contrast, the majority of provinces in the northeast, northwest and southwest performed below the national norm.
Moreover, while in the first half of the year the production value of state-owned factories rose by a mere 10 per cent, that for collective enterprises shot up by 45 per cent.
The figure for industrial units in other sectors, including private enterprises, was 69.4 per cent.
The Statistical Bureau indicated that with its leaps-and-bounds growth, the non-state sector now accounted for 45.7 per cent of national industry.
Chinese economists said the State Council had already passed measures to slow down the coastal and the non-state sectors through both executive orders and market levers.
''Beijing may be forced to rely more on state fiats, as experience shows market mechanisms have not been effective in reining in the coastal and private sectors,'' a source said.
In a dispatch last night, the state-funded China News Service (CNS) said ''the central authorities have decided to increase the force of macro-level adjustments and controls'', considered a euphemism for government fiats.
''A double-pronged method of executive and economic [policies] will be used,'' CNS reported, meaning both types of measure would enjoy equal emphasis.
As evidence of overheating and disorder, CNS cited soaring costs and depleted supplies of energy, raw materials and transport.
Chinese sources said the austerity measures would be likely to continue to at least mid-1994.